Starbucks’ Chinese rival files for U.S. IPO
A fast-growing Beijing-based start-up is looking to raise more cash to fund its expansion — and give Starbucks even more competition.
Luckin Coffee Inc. has filed for an initial public offering with the U.S. Securities and Exchange Commission and set a placeholder amount of $100 million to indicate the size of the IPO, a filing with the regulator showed. The coffee chain, which was founded in June 2017, has expanded at a breakneck pace. It operates some 2,370 stores in 28 cities in China and plans to open 2,500 new stores this year. Many of its locations are kiosks that emphasize takeaway and delivery of online sales.
In its latest round of funding, Luckin raised $150 million from investors including BlackRock Inc, valuing the company at $2.9 billion, reported Reuters. The report noted that the company has yet to turn a profit.
Luckin’ rapid expansion puts it in direct competition with Starbucks, which has targeted China as its major growth market. Starbucks operates more than 3,500 locations in China. But the chain’s same-store sales in the country have slowed somewhat. Starbucks is planning to open nearly 600 locations annually in China, with a goal of 6,000 by the end of 2022.
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